Analysis: Minnesota energy bill would harm consumers

Published May 4, 2017 This week, the Minnesota House and Senate released the latest draft of its package of energy funding and policy bills. The bill would harm Minnesota utility consumers, and CUB urges a "no" vote. The energy package is contained in the broader Jobs omnibus bill (SF 1937). The energy provisions would:

• Hurt jobs, residential and small business customers, and the economy overall;
• Make it harder and more expensive for rural Minnesotans to reduce their energy spending;
• Put Minnesotans on the hook for expensive energy investments that haven't been proven to be cost effective; and
• Leave rural Minnesotans with no true recourse if their utility overcharges them for having solar panels.

Make your voice heard by contacting Governor Dayton and the members of the conference committee: Senate Chair Miller and Senators Dahms, Osmek, Paul Anderson, and Champion; and House Chair Garofalo and Representatives Newberger, Hoppe, O'Neill, and Mahoney. CUB opposes or is asking for changes to the following provisions. * Prioritizing economic development and jobs in utility regulation. Economic growth and jobs are important considerations -- but the bill would prioritize low utility costs for business above residential affordability, large businesses over small businesses, and status quo energy jobs (e.g. in expensive coal plants) over jobs in the renewable and efficiency industries or other businesses that would benefit from cheaper, cleaner power generated by other sources. * Exempting small utilities from the Conservation Improvement Program. Cooperative utilities with fewer than 5,000 members and municipal utilities with fewer than 1,000 customers would no longer have to offer conservation rebates and incentives to their customers. People in rural areas should have access to these programs, just like people in larger cities. The programs help consumers reduce energy usage, save money, and reduce emissions, and they help the utility save money, because it's often cheaper to conserve than to purchase the energy that would have otherwise been used. * Taking away co-op and municipal utility customers' ability to take solar complaints to the PUC. If cooperative utility member has solar panels or other generation at their property, the utility can charge them an extra monthly fee -- but that fee has to be in line with state law. If the member thinks the fee is too high and doesn't comply with the law, they can bring a complaint to the PUC. The bill would leave customers with no fair and accessible protection from being overcharged, which will discourage people in rural areas from getting solar panels. * Eliminating certificate of need for large renewable energy projects and pipelines. Without certificate of need, Minnesotans would be on the hook for expensive, decades-long investments without knowing whether those investments are actually cost effective. Renewable energy is an excellent resource for consumers, but these provisions eliminate a significant protection for customers of monopoly utilities. * Setting a state goal that electric rates be 5% below the US average. Affordable energy is CUB's goal, but this language isn't drafted in the most effective way. The focus on rates instead of total costs could encourage utilities to shift more costs to fixed monthly fees on bills -- which customers can't control. And we don't want utilities to put of needed investments or stop good innovation to keep rates low in the short term, because this could be much more expensive in the long run. CUB supports a provision in the bill to increase consumer protections in the residential Property Assessed Clean Energy (PACE) program. PACE programs let people pay back energy improvement loans through their property taxes. In Minnesota, PACE has been working well for commercial properties, and CUB is interested in it as an option for homeowners, too. However, consumer protections are needed before PACE loans are sold to residential customers. The bill puts residential PACE on hold until consumer protections can be put in place, and names CUB to a task force to address the issue. Unfortunately, the bill overall harms consumers more than it helps them.